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A reduction in public spending on science would deter companies from investing in research and development and hinder efforts to solve major world problems, the head of the research councils has warned.

The dangers posed by cuts were outlined to MPs on the House of Commons Science and Technology Committee on 3 February as part of its inquiry into the impact of spending cuts on science and scientific research.

The inquiry is being held in the wake of the pre-Budget announcement that £600 million is to be cut from the science and higher education budgets between 2011and 2013.

Alan Thorpe, chair of Research Councils UK, told the committee that cuts would lead to a fall in the number of trained scientists available to enter the workforce.

He also predicted that private sector investment in UK science would “go down straight away” and that the country would be less able to address the “grand” problems it faced.

Adrian Smith, director general of science and research at the Department for Business, Innovation and Skills, has asked the research councils to gather evidence about the potential effects of cuts.

But Professor Thorpe said that a reduction in research council budgets should not be seen as inevitable, adding that RCUK was making a strong case for maintaining investment.

“Obviously the public purse is tight… [but] now is the time to hold our nerve and continue that investment,” he said.

Iain Gray, head of the Technology Strategy Board, joined Professor Thorpe in calling for investment to be maintained.

“Public sector investment in science and research has been key to attracting private sector investment… Now is the time to further invest, not to make cuts,” he said.

Also giving evidence was Tony Peatfield, director of corporate affairs at the Medical Research Council, who warned that cutting the science budget would jeopardise links with industry as well as research, predicting that the number of clinical trials would fall.

The committee considered whether the UK would have to focus more strategically on certain areas of research, adopting a policy of “picking winners” if cuts are made.

It heard conflicting views about whether it was sensible to maintain a broad research base at a time of diminishing investment.

Lord Broers, chairman of the House of Lords Science and Technology Committee, told the panel of MPs that he would be in favour of “biting the bullet and focusing a bit more”, although he acknowledged that this would mean “there are going to be losers”.

However, Professor Thorpe said he favoured maintaining the current approach. “We need all parts [of the research base] to contribute to grand challenge problems,” he said.